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Fundamentals of Claims Management

Fundamentals of Claims Management



Effective claims management has become a sophisticated process and one that draws upon numerous areas of expertise including data analysis, accident investigation, managed care, return to work, ...

Effective claims management has become a sophisticated process and one that draws upon numerous areas of expertise including data analysis, accident investigation, managed care, return to work, subrogation, alternative dispute resolution, structured settlements, and Medicare compliance as well as more traditional areas of claims expertise. Technology is continually evolving allowing the risk manager improved decision-making capabilities. Strong claims management fundamentals can apply to any major line of coverage including general liability, workers’ compensation, and auto liability. This session will explore how to identify key cost drivers, ways to better integrate claims resources, how to achieve faster reporting, the use of performance standards and guarantees, and how to evaluate the quality of your current claims services.



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  • A Job Safety / Hazard Analysis helps in this aspect:Task – Was an unsafe work procedure used?Change in normal work conditions? Appropriate tools and materials available and used?Safety devices working? Lockout/tagout used, if applicable.Material – Was there equipment failure, and if so, what caused it to fail? Was material badly designed?Were hazardous substances present, and were they clearly identified?Was correct PPE used? Were users of PPE property trained?Was there regular maintenance of equipment?People – need to stress that you are not trying to assign blame, but you do need to explore the human factors involved, such as :Was the worker properly trained and experienced ?Physically able to perform tasks?Tired? Stressed? Health issues?What about substance abuse? – post accident testing – in many states, if EE was under the influence and it was sole cause of event, employer has a remedyIn looking at management, need to ask: were safety rules adequately communicated & understood by all? Written procedures enforced? Was there adequate training and supervision?Were unsafe conditions corrected? Adequate on-boarding / OJT program if new employee?Environment – What were the weather conditions? Was poor housekeeping an issue? Was it too hot or too cold? Was excess noise a problem? Was there adequate lighting? Were hazardous gases, dust , smoke or fumes present?
  • You are seeking to find the root cause(s) of the incident, and thus develop a plan to minimize the possibility of a re-occurrence. Who should be on the team? Safety managerSafety committee member(s)Injured worker’s supervisorOther supervisor familiar with the job
  • Critical to get claims investigated and reported promptly. The longer you wait, the fuzzier the details become and the likelihood of attorney involvement increases.This is for med-only (first aid) and incident only, not just lost time

Fundamentals of Claims Management Fundamentals of Claims Management Presentation Transcript

  • Jeff BrodyDivisional Safety Director, Pepsi Cola Bottling Company of New YorkKathy TazicSenior Vice President, Client Services, SedgwickVicki TelfordDirector, Global Insurance and Risk Management, Hanesbrands Inc.Tuesday, April 23, 2013Session Time: 2:15 to 3:30 p.m.
  • Agenda• Claims investigation• Medical management• Disability management• Litigation management• Resolution• Updates and developments• Q&A
  • Claims investigation
  • Workers’ compensation• What are the most important aspects ofthe claims investigation process?• Timely witness interviews• Detailed written report• Recorded statements where appropriate• Evidence• Why investigate a claim?
  • Workers’ compensation• Questions revolve around thesefour basic elements and theirrelationship to one another• Develop a good checklist thathelps identify the pieces of theaccident “puzzle” and how theyfit together• Job safety analyses (JSAs) canbe very helpful by providing thefoundation of the investigation
  • Workers’ compensation• Once the information is gathered, it’s time toget it off to your TPA or insurance adjuster• Ask 5 “W” questions: who, what, where, whenand, most importantly, why• Team approach usually works best• Take pictures and get prompt interviews• Root causes sometimes are elusive,but without them, it’s Groundhog Day!
  • Workers’ compensation cost of reporting lag$0$2,000$4,000$6,000$8,000$10,000$12,000< 3 Days 3 to 7 Days 8 to 13 Days 14 - 30 Days > 30 DaysWC Average CostWC Average Cost
  • General liability• Work from a checklist• Develop/ personalize your form• Team effort with insured is critical• Always keep fraud in your process• Get a statement from claimant, written or recorded veryearly on before they lawyer-up
  • General liabilityTry to secureinformation frommultiple sourcesLook at the scene, takephotos, is there a defect,was there notice? - getinternal reportAnyone working in thearea? - canvas forwitnessesDid claimant contributeto the event?Was it a product thatcaused the accident -who made it?Cameras areeverywhere these days!
  • Auto liability• Paperwork – where is the form• Pedestrians, bicyclists, skateboarders• On-scene pix are essential• Fraud – huge issue in auto liability• By the way, whose fault is it – witnesses• Drivers and other occupants
  • Auto liability• Responders• Police, fire, EMS• Accident reconstruction• Property damage experts• Distracted driving -telematics (technology tocapture real-time info)• Comparative negligence• Arbitration - we needanother set of eyes and ears
  • Medical management
  • Workers’ compensation• Roles and responsibilities• Adjuster• Nurse case manager• Utilization review• Pharmacy benefit management• What is it and why is it critical?• Examples of medical management tools
  • General liability• Sometimes we will get a second medical opinionon necessity of all treatment, issue of tangentialinjuries, soft tissue claims and maximummedical improvement or future care but this isusually later in the claim• Check for priors - do an ISO search - never knowwhat will turn up - there are way too many‘professionals’ out there!• Seldom do we get to manage medical treatment
  • Auto liability• Medical management of your employees will bepursuant to workers’ compensation• No fault - an opportunity for medical mills to dotheir $$$ thing• Not much opportunity to manage driver/otheroccupants• HIPPA laws prevent prying eyes• Use activity checks – know who your claimant is andwhat type of lifestyle they are leading
  • Disability management
  • Workers’ compensation
  • General liability• May require second medical opinion,life care plan, modifications to homeor vehicle• Ongoing physical therapy, prosthesis,home care may be warranted• Settlement may need Medicareapproval• Disability does not mean the end
  • Auto liability• For your employees referto workers’ compensation• For other driver andoccupants• Carefully scrutinize injury,treatment and recovery in lightof severity of collision• Pay special attention to psychclaims• Often unable to control thirdparty Where else? Queens, NY!
  • Litigation management
  • Workers’ compensation
  • General liability• Work with counsel, share all information available, statements, photos,claim, previous history of claims from claimant, problems with the site• Defend or negotiate a settlement - take a position• Attend settlement/mediation hearings, have pre-arranged range ofagreed upon values• Let the attorney do the talking - but make sure you understand what he issaying and why• Stay away from jury trials in unfriendly venues bent on giving away yourclient’s money• Be ready for day of haggling - it’s an art - learn it!• 90% of claims can resolve prior to court
  • Auto liabilityAbility of adjuster toresolve matter priorto litigation• Settle non-disputedportions of the claimSettle v. litigate -what is yourpreferenceWork with a team oftrained legalprofessionals familiarwith your business• Clear understanding ofyour legal strategies
  • Resolution
  • Workers’ compensationSome settlement strategiesand considerations:• Adjuster negotiations• Mediations• Use of annuitiesWhen is it a good idea tosettle a claim?What constitutes anacceptable result?Other tools, includingsurveillance
  • General & auto liability• Goal should be to resolve prior to attorney on board - negotiate fair settlementwith pro se claimant• If the claim is multi-part, settle what you can where liability is clear• You can still negotiate with attorney prior to S&C – don’t be intimidated - usemediation or arbitration if far apart• Review defenses and immunities early on, if counsel agrees, seek a motion forsummary judgment (MSJ)…if not:• Fact find from involved parties, witnesses and experts• If unfavorable – negotiate settlement• Don’t be intimidated by a huge med file• Use settlement or mediation when possible - if you can’t settle within range ofcomfort, get ready to defend
  • Updates and developments